Emmerson PLC (AIM:EML) said environmental approval for its Khemisset fertiliser project in Morocco has now been referred to a national ministerial committee, passed up from the regional level.
The local regional committee was unable to approve the application, so Emmerson exercised its right to refer the project to the national committee.
Any decision hinges on the impact of the project on water resources for the region, said Emmerson, adding this is a sensitive issue in the context of climate change and recent droughts.
Issues raised have centred around the disposal of brines through deep well injection; the storage of salt tailings at surface; the use of water from local sources; and the impact of the project on local highways and land users.
The company reiterated that it believes the measures taken to address all concerns raised, combined with the project's significant economic benefits and contribution towards addressing food security, are compelling.
Emmerson also stated that basic engineering studies at Khemisset are reaching completion with final reports and designs due shortly.
Project finance due diligence will run in parallel with an updated Bankable Feasibility Study (BFS) that will be carried out following environmental approval.
Graham Clarke, the company's chief executive, said Emmerson remained confident the national committee will take into account the significant amount of time and investment that has gone into minimising the environmental impact of the project.
He noted: "As soon as the permit has been granted, we will move to complete a BFS, which will include updated numbers for the market. We expect this study, which is a requirement of banks and other financiers, to take approximately six months.
“Energy forms the largest single part of the operating costs. The improvements we have identified during the basic engineering will also need to be quantified and used as updated inputs for the financial model.
“We believe cost inflation will apply to all potash projects, and we expect Khemisset to remain in a competitive position on the cost curve not least due to its favourable geology and location.”